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Retroactive payments to disabled vets could go back four decades: document

Dennis Manuge, lead plaintiff in a class-action lawsuit between disabled veterans and the Government of Canada, attends a news conference in Halifax on Tuesday, May 29, 2012. (Andrew Vaughan / THE CANADIAN PRESS)

The Canadian Press
Published Monday, October 1, 2012 4:50PM EDT

OTTAWA -- Compensating disabled veterans for the clawback of their military pensions could cost more than expected because the federal government is now considering retroactive payments going back almost four decades.

Internal government estimates have suggested the settlement could run to $600 million, a figure that may turn out to be low.

Late last week, lawyers representing ex-soldiers revealed that federal negotiators were still crunching numbers for the total compensation package and it was being "complicated by the fact the proposed amounts may go back to the start of the offset in 1976," according to a letter obtained by The Canadian Press.

One of the veterans affected by the lawsuit said the federal government has only itself to blame.

"I can't see it going to $1 billion, but if it does, the government was really stupid to let this go as long as it did over 40 years," said Ron Cundell, a former sergeant and disabled veteran living near Barrie, Ont.

Until last spring, the Harper government fought a protracted legal battle against a class-action lawsuit by 4,500 disabled veterans whose long-term disability benefits were reduced by the amount of their monthly Veterans Affairs disability pension.

The Federal Court sided with the ex-soldiers last May and the judge "unreservedly" rejected the government's arguments.

The government "had to have known that what it was doing was wrong," said Cundell, a veterans advocate.

The insurance company that administers the program on behalf of the Canadian Forces apparently urged the federal government almost a dozen years ago to change the system, said Cundell.

In abandoning the legal fight, the government appointed Stephen Toope, the president of the University of British Columbia, to negotiate with the Halifax legal team of Dennis Manuge, the former soldier who launched the court action.

The Federal Court will have to approve any agreement and lawyers for the veterans estimate there won't be a deal to put before a judge until January.

A spokesman for Defence Minister Peter MacKay wouldn't comment on costs, but said the government is trying "to reach a mutually acceptable settlement."